FOR PRIME MINISTER

1. Your telegram August 13th. [1] (New Caledonia Nickel) Reference
in my telegram 659 [2] to 600 tons was due error in decyphering
your telegram July 30th [3] by which it read that you had
contracted for fifty tons matte monthly or 600 tons in year. Now
clear that contract is for 450 tons monthly.

2. I have been in touch with the Ministry of Economic Warfare who
wish to offer the following observations:-

(a) They consider the action of the Australian Government in
contracting to buy 5,400 tons of matte from New Caledonia in the
coming year as most helpful and of considerable assistance in
their policy of denying nickel to the enemy and to Japan.

(b) They understand that production of matte will now be
restricted by the Company to 5,400 tons in the next twelve months.

They suggest that towards the middle of this period Mr. Vois [4]
might be approached regarding a further restriction of production
in the following year.

(c) They understand that this matte will be regarded by the
Australian Government as a strategic reserve and will not be
placed on the export market.

(d) They would not object to Japan being allowed to exports a
total of 25,000 tons of low grade ore per annum, but they would
prefer shipments (i) to be spread over monthly instalments; (ii)
to be carried in Japanese vessels; and (iii) to be covered by
guarantees of non-re-export by the Japanese.

(e) They would be glad to know details of any Japanese reaction to
the Australian Government's purchase, and perhaps Mr. Ballard [6],
in conjunction with H.M. Consul at Noumea [7], could keep them
informed.

BRUCE